UAL747
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What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 2:27 am

Emirates now has 100 777's, the largest fleet of them in the world, most being 77W's. They currently also have the largest fleet of A380's with more on order. The UAE is a relatively small country for such huge amounts of seat numbers. I do realize that DXB is a bit more of a transfer hub, but how do they make it work?

Some say it is because they have a flawless business model, others say they receive funding from the government. How does this airline do it?

UAL
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SonomaFlyer
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 2:46 am

Its a combination of things, some of which you touched on.

*Geography - DXB is the perfect point to transfer from Europe to S.Asia, Oceania and East Africa. It also can replace Europe as a transfer point for N.America.
*Service - They've had growing pains but they they put on a good hard and soft product.
*Scheduling, they usually have multiple flights which gives lots of options to travelers coming and going.
*Price - They are very competitive but will bump up prices once they establish their markets.

Cost structure. Basing out of the UAE gives them certain advantages as far as labor and maintenance costs. The fact there's government ownership could have other advantages but that's a matter of debate. Their CEO is a famous curmudgeon who wrings great deals on aircraft in terms of price and performance.
 
Burj
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 3:37 am

One aspect that is often over looked is that EK's growth is part of the natural expansion of air travel and has come at the expense of other carriers.

For instance PK and AI are shadows of what they should be based on local population because so much of their "home" market travels on EK.
 
blink182
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 3:39 am

Quoting SonomaFlyer (Reply 1):

*Geography - DXB is the perfect point to transfer from Europe to S.Asia, Oceania and East Africa. It also can replace Europe as a transfer point for N.America.

Made possible by ULR aircraft. Fifteen years ago, you couldn't fly LAX-DXB-BOM or nonstop DXB-SYD.
Give me a break, I created this username when I was a kid...
 
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DocLightning
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 4:17 am

EK also probably gets a fair amount of tax breaks from its governments. Its labor costs can be lower because (at least for front-face employees), they maintain a pretty young employee roster, which means that there aren't many senior FA's and CSR's. In addition, they don't have to deal with a union. I don't know what sort of financing they get on loans, but I'd bet it's pretty good.

EK also offers a superior hard and soft product for business and high-yield passengers traveling between Europe and Australiasia as compared with most other carriers, while their Y-class product can be a bit cramped on the 777, but it is still superior to other carriers in many ways.

They focus on routes that they are sure have a relatively large demand, allowing them to operate a widebody-only fleet. This means that they can use larger aircraft, which have a lower CASM as compared to smaller aircraft. By contrast, a national carrier like AF or UA has to maintain a fleet of less efficient narrowbodies for missions under 4-5 hours. That drives up their fleetwide CASM.

Geography is one bit, but then there is also the fact that they again have a very friendly government that will happily build them more terminal space and more runways if politely asked.

Finally, good management figures in. Tim Clark really has been a miracle worker. He's a natural and he has a knack for this job. I do wonder if he will manage to leave a strong enough legacy when he retires. He is getting pretty old.
-Doc Lightning-

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MaverickM11
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 5:36 am

Quoting DocLightning (Reply 4):
Geography is one bit, but then there is also the fact that they again have a very friendly government that will happily build them more terminal space and more runways if politely asked.

   That's pretty much the alpha and the omega of EK: the explicit and implicit government support plus a great geographical location.

Quoting burj (Reply 2):
For instance PK and AI are shadows of what they should be based on local population because so much of their "home" market travels on EK.

...having basket cases for competition in a heavily populated neighborhood certainly help too.
E pur si muove -Galileo
 
Aviational
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 6:42 am

Quoting burj (Reply 2):
For instance PK and AI are shadows of what they should be based on local population because so much of their "home" market travels on EK.

.
True ! Just for an idea, EK has 4 flights a day to KHI, while PK only 1...
 
ghifty
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 6:52 am

I'm sure the fact that most soccer teams have "Emirates" logo on them contributes to this.

A lot of people at my school know what "Emirates" is. Most of them think it's still a 5* airline... personally, I don't see what the love-affair is all about. From what I've read, EK is subpar.
Fly Delta Jets
 
JayinKitsap
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 7:26 am

As noted above DXB is a well located hub for travel from Europe to the Middle East, India, Africa, and Asia /Australia as the hub is not substantially off of the direct flight path. It allows for a single hub to serve a wide area (vs multile hubs).

EK is a young airline relatively so does not have a lot of legacy costs (pensions, etc), probably has good fuel, financing, airport fees etc. That gives it a good cost advantage.

DXB is also a freight center for a huge amount of materials that come into the Middle East for Oil and Construction. If the plane isn't full of passengers, the belly is heavy.
 
bill142
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 7:42 am

All that free oil they get     
 
panais
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 7:56 am

May I add some more reasons why they are successful.

1. They have a can do government. If they need more customs staff at the DXB airport they will have them in 24 hours.

2. Islamic finance. There is a huge pool of capital that is allocated on buying assets and doing profit sharing with the investors and EK instead of EK issuing bonds to them and paying them interest. Additionally, these are long term investors and an airplane is a long term revenue generating investment.

3. 1st long distance LCC. EK is the first carrier to put 10 abreast on its 777s and 7 abreast business class on its A330s.

4. Extremely healthy and profitable First class customers. EKs first class fees are out of this world. With an excellent product and a large amount of people, emirs, royal families, CEOs, etc willing to pay those fees, EK can be profitable and successful.

Highly doubt if their model can be replicated anywhere in the world.
 
Burkhard
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:01 am

I would call the following reasons:

- An infinite amount of money to invest
- No taxes to pay
- Fortunate fuel prizes
- Blackmailing of other countries to get traffic rights on expense of local airlines
- Intense media work - Emirates uses to invite journalists for a free vsit to one of their luxury hotels to generate positive reports.

Add to this they are no bad airline.
 
BMI727
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:13 am

Quoting UAL747 (Thread starter):
How does this airline do it?

There's a lot of things that go into it.
1. Dubai is perfectly placed in between Europe and Asia plus Australia.
2. The growth in Asia.
3. Friendly government and regulatory environment.
4. Nearly unconstrained airport expansion while many European airports hubs suffer from congestion and NIMBY entanglements.
5. Running a good airline with good service and efficient aircraft.
6. High cost structures and struggles of European carriers, their governments, and regulations. Air India being FUBAR hasn't hurt either.
7. Expansion in the Middle East leading to many Indian and Asian expats coming to the region. (That's a big one for FlyDubai)
8. Increased fuel prices making ultra-long flights less economical.
9. They had the vision and funding to try it and pull it off. Then they get economies of scales and it snowballs. Those sheikhs are hiding some pretty large cojones under their robes.
Why do Aerospace Engineering students have to turn things in on time?
 
mikey72
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:16 am

Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
koruman
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:27 am

One answer for UK to/from Asia, Australia and New Zealand.

THEY LET YOU FLY TO/FROM YOUR NEAREST MAJOR AIRPORT ONE-STOP VIA A CENTRAL HUB, without making you pass via additional hubs like London Heathrow or Sydney.
 
Centre
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:32 am

Quoting DocLightning (Reply 4):

EK also probably gets a fair amount of tax breaks from its governments.

fact check:

http://www.taxrates.cc/html/united-arab-emirates-tax-rates.html

As for government support to EK, I'm sure there is payback down the road.
I have cut 4 times, and it's still short.
 
Quokkas
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:33 am

Quoting panais (Reply 10):
3. 1st long distance LCC.

I am not sure what you mean by LCC. EK is still a full service airline and offers in-flight meals, generous baggage allowances (Economy Class customers can check in 30 kg, Business Class travellers 40 kg and if you are flying First Class you can travel with 50 kg of checked baggage,) and you don't need to swipe your credit card to watch a movie.

They are below par when it comes to 3-4-3 in Y or 2-3-2 in J but passengers seem willing to travel on their aircraft and it's not always because they are the cheapest. Often they aren't but they do offer a large number of travellers one-stop connectivity to airports that other carriers are either unwilling or unable to provide.

Quoting Burkhard (Reply 11):
- Fortunate fuel prizes

It is extremely generous of FRA to offer below market rate fuel to EK.  

The cheap fuel argument comes up all the time despite EK publishing letters from fuel suppliers refuting the claim that they receive special treatment and the fact that EK purchases fuel on the market in Singapore. Why would fuel suppliers there offer preferential treatment to EK and not SQ? Remember that Dubai is not a major oil producer and there is no reason for Abu Dhabi to subsidise EK when it has its own carrier - EY.

Quoting Burkhard (Reply 11):
- Blackmailing of other countries to get traffic rights on expense of local airlines

In what way? Do you have a specific example in mind?

Quoting Burkhard (Reply 11):
Add to this they are no bad airline.

There I would agree with you. My experiences with them have always been positive.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
kiwiandrew

RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:38 am

Quoting koruman (Reply 14):
One answer for UK to/from Asia, Australia and New Zealand.

THEY LET YOU FLY TO/FROM YOUR NEAREST MAJOR AIRPORT ONE-STOP VIA A CENTRAL HUB

Not from New Zealand.... all 4 daily New Zealand-Dubai flights stop in Australia in both directions...however, given the range of destinations they can offer a 2 stop service with one change is still pretty attractive.
 
mikey72
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 9:16 am

Quoting BMI727 (Reply 12):
There's a lot of things that go into it.
1. Dubai is perfectly placed in between Europe and Asia plus Australia.
2. The growth in Asia.
3. Friendly government and regulatory environment.
4. Nearly unconstrained airport expansion while many European airports hubs suffer from congestion and NIMBY entanglements.
5. Running a good airline with good service and efficient aircraft.
6. High cost structures and struggles of European carriers, their governments, and regulations. Air India being FUBAR hasn't hurt either.
7. Expansion in the Middle East leading to many Indian and Asian expats coming to the region. (That's a big one for FlyDubai)
8. Increased fuel prices making ultra-long flights less economical.
9. They had the vision and funding to try it and pull it off. Then they get economies of scales and it snowballs. Those sheikhs are hiding some pretty large cojones under their robes.

Oh pass me a bucket.

Look up the word 'veneer' in the dictionary please.

All that aside, business is business.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
MaverickM11
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 1:49 pm

Quoting Quokkas (Reply 16):
Remember that Dubai is not a major oil producer and there is no reason for Abu Dhabi to subsidise EK when it has its own carrier - EY.

Abu Dhabi has implicitly subsidized EK by throwing tens of billions of dollars at a Dubai bailout--after all, if Dubai hadn't dumped hundreds of billions of dollars into Dubai Inc, EK's P&L would look quite different.
E pur si muove -Galileo
 
JerseyFlyer
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 2:02 pm

Quoting MaverickM11 (Reply 19):
Abu Dhabi has implicitly subsidized EK by throwing tens of billions of dollars at a Dubai bailout

Isn't that simply what you would expect to happen in the "United" Arab Emirates? Like it would in the "United" States of America?

Put simply EK's game - changing business strategy is to be based in the first global hub location, with anywhere connected to everywhere via DXB with only one chgange pf plane. Today's long range planes enable fulfilment of this strategy.
 
Quokkas
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 2:09 pm

Quoting MaverickM11 (Reply 19):
if Dubai hadn't dumped hundreds of billions of dollars into Dubai Inc, EK's P&L would look quite different.

Not necessarily because the airline itself was (and is) profitable and paid a dividend to the holding company (and indirectly the Government of Dubai). The bailout was a response to other areas of the economy under-performing. One can speculate what might have occurred, but the airline could have kept going as a profitable concern. There has been speculation over whether Abu Dhabi demanded a stake in EK but no-one has confirmed that.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
panais
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 2:10 pm

Quoting Quokkas (Reply 16):
I am not sure what you mean by LCC. EK is still a full service airline and offers in-flight meals, generous baggage allowances (Economy Class customers can check in 30 kg, Business Class travellers 40 kg and if you are flying First Class you can travel with 50 kg of checked baggage,) and you don't need to swipe your credit card to watch a movie.


I know what you mean but this is my opinion. I rate their economy class product similar to a Low Cost Carrier. In-flight meals, baggage allowance and a movie are not my differentiators. I can do without them. Seat size and comfort are as well as boarding and de-boarding times.
 
MaverickM11
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 2:22 pm

Quoting Quokkas (Reply 21):
Not necessarily because the airline itself was (and is) profitable and paid a dividend to the holding company (and indirectly the Government of Dubai).

Right, but EK would be quite different if Dubai didn't build Dubai, and nearly go broke doing so, requiring a bailout from its sister emirate.

Quoting JerseyFlyer (Reply 20):
Isn't that simply what you would expect to happen in the "United" Arab Emirates? Like it would in the "United" States of America?

Not necessarily--the governments are quite different. One is elected, for example 
E pur si muove -Galileo
 
LondonCity
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 2:23 pm

Quoting burj (Reply 2):
One aspect that is often over looked is that EK's growth is part of the natural expansion of air travel and has come at the expense of other carriers.

True. Look at how major Asian carriers like SQ, TG and MH have hardly grown their kangaroo route services since the Gulf carriers became established Don Under.

Quoting DocLightning (Reply 4):
Geography is one bit, but then there is also the fact that they again have a very friendly government that will happily build them more terminal space and more runways if politely asked.

And lack of curfew restrictions at Gulf airport, the ability to 'hire and fire' staff at will, no Passenger Rights legislation to bother with, no costly taxes etc.

Quoting koruman (Reply 14):
THEY LET YOU FLY TO/FROM YOUR NEAREST MAJOR AIRPORT ONE-STOP VIA A CENTRAL HUB, without making you pass via additional hubs like London Heathrow or Sydney.

That is becoming a major selling point as EK can link expat communities all over the world, eg DUB-DXB-SYD, or VCE-DXB-MEL or DUS-DXB-NRT and so on.
 
hohd
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 2:40 pm

First they built the critical mass by having implicit government support, airport support and flying from Indian Subcontinent to key Europe, Africa and Midde East cities and offering convenient one stop options.

After they built the critical mass, it became easier to expand, they no are longer dependent on one area for traffic.

They have a low tax base in Dubai and many of the worker wages are lower.

Plus, while price wise, they are not the cheapest, they are most competitive for last minute tickets and one way tickets. Most airline tickets become very expensive if you purchase within 1 to 3 days and also for one ways.
 
Quokkas
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 3:08 pm

Quoting LondonCity (Reply 24):
And lack of curfew restrictions at Gulf airport, the ability to 'hire and fire' staff at will, no Passenger Rights legislation to bother with, no costly taxes etc.

The positive attitude to aviation in Dubai certainly helps but during an interview with Tim Clark a few years ago he lamented that he simply could not launch new services at will or change flight times to suit because of curfews at airports overseas. He gave the example of how a 4.00AM departure at DXB would hit the SYD curfew. So while DXB is liberal, the airline has to fit into the various constraints imposed on all airlines elsewhere.

The same applies to Passenger Rights. The rights any passenger enjoys are often determined by the country in which a fare is sold or where travel originates. So a passenger travelling from/ to the EU on EK has the same rights as any other passenger travelling from/ to the EU. Mind you, even EU carriers can become infamous for ignoring passenger rights. In the long run, ignoring passenger rights can work against an airline rather than for it.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
LondonCity
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 3:22 pm

Quoting Quokkas (Reply 26):
So a passenger travelling from/ to the EU on EK has the same rights as any other passenger travelling from/ to the EU.

Not strictly true. EU passenger rights legislation covers passengers on all airlines departing the EU. But only EU-based airlines have to honour EU passenger rights when flying to the EU from a city outside the EU. In other words, EK must abide by EU rules when flying from, but not heading to, the EU.


http://www.caa.co.uk/default.aspx?catid=2211&pageid=12717
 
Quokkas
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 4:03 pm

Quoting LondonCity (Reply 27):
Not strictly true.

Thank you for the correction. The same applies in Australia. Sell a fare in Australia and you are bound by local laws. So, if a passenger flies from a country that has Passenger Rights to another country that offers the same or similar, there hopefully won't be too many problems (given that the majority , though not all flights are return even if from another airport.) Naturally if you happen to be in a country where nobody has any rights, too bad. But I suspect that all airlines operate on a similar basis.

Either way, in Section 9 of the EK conditions of carriage, which are contestable in courts in the UAE and overseas, the obligations of EK and the options available to passengers are clearly stated.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
directorguy
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 4:47 pm

You also have to consider how EK in the first fifteen years of its existence. Its growth was very gradual, and reflected the increase in demand. EK did not overtake Saudi Arabian Airlines in size/fleet size/pax carried until the 2000s. And furthermore, EK's growth trajectory always ran parallel to that of the city it serves. Airlines did not stop serving DXB-on the contrary, they have continued to increase. If Dubai as a business and tourism destination was't that big, then I doubt EK's growth would have happened the way it did.
 
kdhurst380
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 5:07 pm

Quoting panais (Reply 10):
3. 1st long distance LCC. EK is the first carrier to put 10 abreast on its 777s and 7 abreast business class on its A330s.

Actually, British Airways pioneered 10 abreast 777's, and promptly got rid of it after the swarm of negative feedback from customers on the layout. I must say, having flown on an AF 777 for an hour, the 10 abreast was just about enough, on a longer flight for me it'd be too much. I'm in no rush to fly EK, they're a bit like VS, great marketing and public image, but the product is pretty average.
 
Quokkas
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 5:37 pm

Quoting directorguy (Reply 29):
If Dubai as a business and tourism destination was't that big, then I doubt EK's growth would have happened the way it did.

This is a good observation. Alongside the growth of EK we have seen the growth in the number of non-UAE carriers and their frequencies to DXB. To be sure, some of that growth feeds connections with other carriers and EK but a lot of it feeds the growing expatriate local demand and tourism - especially shopping! Dubai Duty Free is one of the largest and most profitable companies around.

The Emirate of Dubai has viewed the development of an airline as being essential to the growth of Dubai. The ruling family have long recognised that they could not rely on oil to survive and that they needed to diversify. EK is part of that essential growth. Simply being a transfer hub would not have resulted in the property and housing boom that Dubai has witnessed, nor would it have seen Dubai become a focus for various other industries that have become established there. I know that there are those who argue that the Government couldn't run a chook raffle, but ...

While EK does carry a huge number of passengers they also carry significant numbers of O&D passengers. depending on the source this ranges between 25 and 40%. I assume that the higher figure includes those who book stop-overs but even so, the numbers are significant and not dissimilar to other airports located in countries that have relatively small populations.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
shankly
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 5:40 pm

Having been an EK customer since the days of their A310's, two factors stick out for me:

1. They have consistently raised the bar in terms of passenger benefits over their natural and pretender competitors in every service class. For example, their IFE continues to set the standards and some of their lounges are fantastic. Connectivity on pretty much every route I have ever flown with them has been superb, with multiple connection options. These days I rarely spend more than 2hrs in DXB. I can remember the early days of VS and thought the same of them. VS however got lazy and took their eye of the ball...lots of flash but no substance. EK has substance by the bucket full and is for ever looking over the horizon at new opportunities

2. They really understand how to operate commercial aircraft with ruthless efficiency and have been blessed with operating perhaps the finest two sub-sonic commercial aircraft of the last 50 years....the 77W and A380...both absolute cash generators when used to their maximum potential...EK can use the 77W as a route starter....who else in the world can do that?

A very good airline that I am glad is around
L1011 - P F M
 
mogandoCI
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 5:44 pm

One of the biggest reason must be the absolute weakness of AI, the stalled network of 9W, and the collapse of Kingfisher.

EK is the de factor flag carrier for India.

Then there's location. With the invention of 77L, EK can reach pretty much any point of the globe from Dubai (other than HNL, AKL, SCL, and LIM).

DXB is the world's hub.
 
Flanor
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 6:31 pm

Quoting LondonCity (Reply 24):
EK can link expat communities all over the world, eg DUB-DXB-SYD, or VCE-DXB-MEL or DUS-DXB-NRT and so on.

DUS-DXB-NRT (8080 mi) is a 35% longer trip than for example DUS-FRA-NRT (5953 mi). Plus DUS-DXB is 2x daily while DUS-FRA is 7x daily.
 
Jasondn
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 6:56 pm

I would LOVE to see their last balance sheet. I know they are expanding, but are they profitable? and if so, how much more or less than say BA, AI, UA, etc
 
Quokkas
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 7:21 pm

Quoting Jasondn (Reply 35):
I would LOVE to see their last balance sheet.

Please be my guest: http://www.emirates.com/au/english/i...ages/EK-AR-10-11_tcm276-750566.pdf The file is about 2.3MB.

The usual qualifications apply. Do you believe the accountant? Do you believe the auditor? Do you believe the banks and creditors accept this? The same questions that apply to any other airline or business.  
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
AAIL86
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 7:27 pm

Quoting mikey72 (Reply 13):
What about this..

http://ezralevant.com/2011/01/emirates-airlines-owned-by-dic.html


Spot on article. Thanks for posting.  
Next
 
LH7478i
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 7:45 pm

How much do they pay for their fuel compared to european or american carriers ? Since they are "sitting on it" I could imagine they have quite an advantage over other carriers.
A319, A320, A321, A333, A346, B733, B735, B73G, B738, B744, B748, B757, B767, CRJ200, CRJ700, CRJ900, EMB135, EMB145, E1
 
MaverickM11
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 7:52 pm

Quoting LH7478i (Reply 38):
How much do they pay for their fuel compared to european or american carriers ? Since they are "sitting on it" I could imagine they have quite an advantage over other carriers.

EK benefits from a lot of things, none of which is fuel. It's primarily a supportive government, and unsupportive EU/Indo/Paki governments.
E pur si muove -Galileo
 
Quokkas
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:12 pm

Quoting LH7478i (Reply 38):
Since they are "sitting on it" I could imagine they have quite an advantage over other carriers.

As posted earlier, Dubai is not a major producer of oil and even if it was the oil would need to be refined. You can't simply pump oil out of the ground and into an A380.

Dubai is endeavouring to increase refining capacity but fuel suppliers still purchase most of their aviation fuel on the open market, just like at every other airport. Bilateral agreements also mean that the UAE can not charge any fees, levies, taxes, whatever in a discriminatory manner. Just as the German Government is unable to charge EK or EY extra for fuel because they are not German.

One might also ask, how does OS benefit from the cheap oil that Austria produces? Yes, Austria produces oil so perhaps I should use the deductive method so often displayed and assume that the only reason LH bought OS (apart from the fire sale price) was for access to that abundant cheap oil. No? Of course Austria produces nowhere near enough to subsidise LH and the same applies to Dubai.

The cheap fuel specifically for EK is a myth and will remain so until verifiable evidence to the contrary is shown. Perhaps the biggest evidence against the myth is the number of airlines that use DXB. Would they really do that if they had to pay more for their fuel, given that there is no other compulsion to go there?
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deconz
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:30 pm

Quoting mogandoCI (Reply 33):
Then there's location. With the invention of 77L, EK can reach pretty much any point of the globe from Dubai (other than HNL, AKL, SCL, and LIM).

I believe DXB/AKL non-stop is possible with the 77L but perhaps not commercially viable at this time. It will happen!
 
F9Animal
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:36 pm

Oil.... That is why.
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LH7478i
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 8:37 pm

Quoting Quokkas (Reply 40):
Dubai is endeavouring to increase refining capacity but fuel suppliers still purchase most of their aviation fuel on the open market, just like at every other airport. Bilateral agreements also mean that the UAE can not charge any fees, levies, taxes, whatever in a discriminatory manner. Just as the German Government is unable to charge EK or EY extra for fuel because they are not German.


Thanks, i didn't know that .


I was thinking about cheaper fuel in general at DXB. With cheap fuel at your hub you should have an overall advantage over your competitors.

But with the help of your comment I'm guessing there is not a big price difference on aviation fuel around the world.
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BMI727
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 9:14 pm

Quoting MaverickM11 (Reply 39):
unsupportive EU/Indo/Paki governments.

That's a big part of it. In a world where competitors have increased regulations, higher costs, and hubs that have to fight tooth and nail to expand, it would be hard for EK to not thrive. And now they get to sidestep a lot of the EU emissions tax too.
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scbriml
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 9:23 pm

Quoting MaverickM11 (Reply 19):
Abu Dhabi has implicitly subsidized EK by throwing tens of billions of dollars at a Dubai bailout--after all, if Dubai hadn't dumped hundreds of billions of dollars into Dubai Inc, EK's P&L would look quite different.

Can you back that up with any numbers? How does support for the Emirate of Dubai by Abu Dhabi subsidise EK? All through the GFC Emirates was making a profit while other airlines lost $billions. Even in Dubai's darkest days, EK was still flying ever more passengers to and through Dubai.

[quote=Jasondn,reply=35]I would LOVE to see their last balance sheet.

Quote:


You can, it's a matter of public record.

[quote]I know they are expanding, but are they profitable?

Only about the most profitable airline on the planet.
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mogandoCI
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 9:32 pm

Quoting deconz (Reply 41):
Quoting mogandoCI (Reply 33):
Then there's location. With the invention of 77L, EK can reach pretty much any point of the globe from Dubai (other than HNL, AKL, SCL, and LIM).

I believe DXB/AKL non-stop is possible with the 77L but perhaps not commercially viable at this time. It will happen!

That's what I meant - not viable in any regular config unless you're doing all-J setup like SQ's A345s.

If it's all J I think the 77L with aux tanks can reach any point on the globe except that empty South Pacific space between New Zealand and Chile
 
MaverickM11
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 9:47 pm

Quoting scbriml (Reply 45):
Can you back that up with any numbers? How does support for the Emirate of Dubai by Abu Dhabi subsidise EK?

What would EK look like without all of the development in Dubai? IE no malls, no hotels, no bigger than the next attraction, no Palm this, Palm that, no skyscraper condos, etc? It would look like RAK Airways 
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scbriml
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 10:08 pm

Quoting MaverickM11 (Reply 47):
What would EK look like without all of the development in Dubai?

Well, it's a symbiotic relationship. As Dubai has grown, EK has grown to support it. As EK grows, it brings more people to and through Dubai.

Quoting MaverickM11 (Reply 47):
It would look like RAK Airways

Certainly not. EK carries more passengers to other destinations than it does to Dubai. EK would be massive even if Dubai were 10% what it is today.
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irishpower
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RE: What Is Behind The Success Of Emirates?

Mon Feb 13, 2012 10:09 pm

I think it is financing. EK borrows money for next to nothing. Their financing costs from the central banks in the UAE must be 1/2 or even less than carriers in the "real" world pay.